Good morning! Markets tell us that Iran peace rumors are not that trustworthy. Despite several strong headlines, the markets are careful to price in progress after being repeatedly rugged by dishonest reporting.
Outside of the Iran war, we saw strong volatility on AI regulation and OpenAI IPO market - details below!
Lastly, we are showcasing new markets on the private companies' valuations. Take a look and get up to speed!
Main Events Of The Day
#1 Iran Peace
The chances for a permanent peace deal shot up as new rumors on an intensive round of negotiations taking place hit the tape.
Traders are more cautious than before though. Only a few weeks ago a headline on Iran working to respond to a peace proposal would send the Yes price above 40c.
However, they still react to bullish news. The deal market reacted softly, but the airspace market, directly related to a new round of kinetic action, took a big hit across the board. Now, military action is not expected at least until the end of June:
#2 The Strait Of Hormuz
The Strait of Hormuz market also reacted softly. The chances for traffic normalization by the end of June hit a modest 35%.
It is a clear indication that traders need to see more hard signals, like a new round of in-person negotiations, to fully price in the positive developments. Energy markets are also modest in their response, with WTI barely dropping below $100 per barrel:
#3 AI Regulation
Based on the most recent leaks, Trump is looking to sign an executive order on AI models federal review as soon as today.
Traders see 71% chance that we will see the order signed by the end of the month. It is a strong signal that the rumor is serious.
The executive order would require AI labs to share their new models with selected federal agencies up to 90 days before the official release.
#4 New Markets Available
Since a few days ago we are able to trade on the valuations of private companies on Polymarket.
The markets, powered by NASDAQ data, track the day-to-day changes in private companies valuations based on transactions on the secondary markets. It's an interesting development as for the first time retail investors are able to trade on private companies.
#5 OpenAI IPO Imminent?
The market shot up on the rumor that OpenAI is looking to file for an IPO "very soon".
Based on the recent leak, the company might file for an IPO as soon as Friday. Initially, the IPO was planned for Q4, but we had close to no news on the progress. With filing expedited, traders see a strong chance of an IPO this year, sending the market to 74%.
Wrap up
We will continue to monitor the situation on prediction markets.
Make sure to follow prediction markets live to get fresh information on the conflict. Stay strong and see you tomorrow for another Morning Brief!
This is not official investment or life advice. Do your own research. These are only my opinions and I encourage anyone to do their own research before putting any money anywhere.